Connect with us

Hi, what are you looking for?

Editor’s Pick

Darktrace hit by fears of sell-off by its early backers

Fears that insiders will dump stock when a lock-up agreement expires this week sent shares in Darktrace tumbling by 15 per cent.

Employees and early backers in the business, including Mike Lynch, the embattled software tycoon, will be free to cash in their shares in the cybersecurity group tomorrow. They had been barred from selling for six months after Darktrace went public in May and may bank profits when the window opens.

Darktrace has been one of the best-performing issues this year, with its shares rising from the 250p offer price to 957p last month. The rally earned the company a place in the FTSE 100.

The prospect of a torrent of “sell” orders sent its shares down by 121p, or 15.1 per cent, to 681½p. The plunge came after a bearish note from Peel Hunt, the broker, prompted a steep sell-off.

Darktrace was formed in 2013 by Lynch, 56, with other cybersecurity specialists. He provided funding through Invoke Capital, the venture fund that he created after the $11 billion sale of Autonomy to Hewlett-Packard a decade ago.

Lynch is fighting extradition to the United States on fraud charges, with a High Court judge expected to rule in the next couple of months. HP accuses him of falsifying Autonomy’s accounts to make the software company look more attractive and it is suing Lynch and the former finance director for $5 billion. Lynch denies wrongdoing.

Darktrace employs 1,600 people in 30 offices worldwide and Lynch and his wife own 16.2 per cent — a holding worth nearly £800 million.

Its machine learning AI helps customers to detect suspicious activity in their computer networks. Darktrace has ridden a boom in spending after a spate of high-profile cyberattacks.

Last week, Peel Hunt became the first broker to issue “sell” advice on Darktrace, arguing that there was a “disconnect between the valuation and the ultimate revenue opportunity”. The broker said that the business relied too heavily on its marketing team to drive growth and asserted that there was a “gap between the promise and reality” of its products. It valued the shares at 473p each.

Darktrace said it “protects” nearly 6,000 customers around the world, a quarter of which it hd signed up in the past year. It added that its tools are used “across every industry sector – from critical national infrastructure through to global banks and corporations.”

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Editor’s Pick

Bowmark Capital, the private equity investor, has backed the buy-out of Cornwall Insight, a leading provider of research, data and analysis to the energy...

Editor’s Pick

Rising diesel prices could soon stop Britain’s fishing crews from setting sail as it becomes too costly to fish, boat captains warned this weekend....

Editor’s Pick

Fewer firms are at risk of failure compared with last year, but smaller companies are struggling to stay afloat after the end of pandemic...

Editor’s Pick

Big Issue Group has revealed its exciting new rebrand and ambitious five-year strategy, which will reflect the organisation’s response to the huge challenges faced...

Editor’s Pick

The UK economy is at significant risk of entering a “mild recession” next year as soaring inflation takes its toll, according to KPMG. GDP...

Financial Advisors

The introduction of aggressive climate objectives by global economies and growing prospects for reducing carbon emissions are driving the growth of the district heating...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Financial Advisors

The healthcare ecosystem is one that has thrived on the cusp of scientific progress, benefitting enormously from the winds of change in the technological...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.